The Economic Potential of People in Poverty in the Philippines: A Social Development on Individualist Approach

     Social development on the perspective of individualist approach proffers the main idea that the welfare of the whole society is enhanced when individuals strive to promote their own welfare. This however  should not be construed on the context of laissez-faire principle which connotes freedom from interference. Under the former, it is more of a cross breed between the laissez-faire
and Interventionist approach. Nevertheless, individualist approach argues in favor of specific interventions by governments within the context of a market economy.

     Further, this approach can only succeed if there is an enabling environment that will permit the individuals to express their fullest
potential as rational economic animals. The role of the economy is indispensable for this approach to succeed. The needs for action to maximize opportunities for individuals to participate and function in the market are emphasized. It is called “the  enterprise culture”. And finally, the government should guide or direct the process of economic growth through institution building or institutional development.

     Highlighted in this approach is the role of the “informal sector”. It is described, not defined, as the economy sector that are heterogeneous in terms of activities and incomes; activities can be easily entered and , too, can be easily exited due to high rate of failure; and extent to which informal activities can enable a decent income with adequate working conditions. Sometimes, I might add that some of these economic activities border on illegalities but nevertheless contributes to the economic life of their family, the basic unit of a society. This explosion of informal sector in developing countries is not brought about by a deliberate economic strategy.  Far from that, instead, these sector came about due to the fact that those in power ignore the needs of the majority, thus, people, in order to survive have to rely on their own resourcefulness to meet their needs.

     Lastly, social workers dispense a dose of their insights by saying that social development goals can be best promoted when  people learn to function competently and when they establish effective relationships with each other. Frank Paiva (1977) defined social development as process of enhancing the capacity of individuals to work for their own and society’s welfare.

     I have this to say… it is my conviction that people in poverty should not be treated as people who “have nothing” but should be people who “have little”.  People in poverty, PIPs for the purpose of this article, had been traditionally viewed as people who have nothing thus must be provided. No matter how noble the purpose may be, the result, and even the process, aggravates the situation instead of helping them. I had learned so far in this course that there is more in poverty or in social development than having only the food to eat or the basic necessities that one need to striive. Social development is to be accepted and be treated as a human in the grasp of an unequal society. In treating them as “have nothing”, we will just be creating a society of
“welfarism” at best, or a “society of beggars” at worst.

     I believe that the better perspective is to look at PIP as “have little”. This means they can and they have something to contribute no matter how little it is. This is where the informal sector is brought to light. It is this “little” that must be developed and be made as “more”. In this perspective, strategies of development must focus on the positive capability of PIP to be more productive than they are now. Yes, PIPs are productive people. Productive in a sense that no matter how poor they may be or how little they may have yet they still have some contributions to the economy and the society.

     A family in poverty is not an idle family. A mother may sell candies and cigarette in the streets of Manila, while the father is in the garbage dump scavenging for reusable or recyclable items to sell, and the children are out there somewhere in the streets shining shoes, selling newspapers, asking alms, or even running drugs, for a fee, for a local drug gang. At the end of the day, what they earned will be used for food for that day, kerosene for their lamp in their 2 meters x 2 meters cardboard house under a bridge and, if lucky enough, a sachet of coffee for tomorrow before they hit the streets again. By buying food, they add to the household consumption figure or even to the gross receipts and income of the store where they brought their food, thus, contributing to the totality of the economy of a country.

     It is this potential (or capabilities as Sen said) of the PIPs to earn and to engage in livelihood in the harshest condition that must be given positive focus of those in power if they truly desire to alleviate these people in poverty instead of trying to eradicate them by mere relocations or giving them livelihood or jobs that mismatched their potentials. I believe that by recognizing what is due to them and what are their capabilities to acquire what is due to them will change the whole scheme of things.

     I firmly believe that strategies in social development, as viewed from the individualist perspective, must first treat this PIPs with
integrity. We must give them the opportunity to enhance their positive potentials through constructive economic activities. And in the end, we give them recognition due to them, the respect or dignity of attention and choices previously reserved for middle class and the rich, and the fair treatment by putting premium on what they have, and what they can do. Is it not that social development or human development as the end objective of economic development is development of people’s capabilities and expansion of their potentials and freedom, as a means and as an end, is all about?

     Secondly, the Philippines’ experience in this informal sector comes to my mind. I work in a local government unit and one of the primordial delegated functions to our office is to be in the frontline of these informal sectors; and developed and integrates them into the formal sector by establishing the needed environment (or the enterprise culture as the article had said) and opportunities conducive to the growth and development of the micro and small enterprise. In short, we must transform the institution that exist so that it empowers people towards an enterprising culture or activities, albeit, the Philippines and its local governments has no comprehensive theory how to support institution that enable this kind of empowerment. I shall reserve however my comment on that matter for the second and third chapter of this topic on social development strategies.

     But the point is, our experience taught us not to look into these PIPs as burden. Instead, we should look upon them as a partner in development and a customer of the private sector. In short, a market of business opportunities waiting to be tapped. In a global scale, if we are going to look into the figures by UNDP data of 2007, there are 1.2 billion people living in $1 dollar a day in a world population of 6.1 billion. That means we have about $14 trillion per year on purchasing power waiting to be developed, bigger than Japan, Germany, Italy, France and UK’s Gross Domestic Products all  combined.

     Sadly, it is not the government sector that had realized this potential in the Philippine’s experience. It is the Private sector that realized this perspective and tailored fit their businesses strategies to tap this informal sector, thus, jumpstarting the culture of “tingi” (literally means by piece). In this business strategy, products and services are developed, marketed, and sold, per piece not by the dozens or bulks, thus allowing the informal sector to tap this products and services. Id est., it will be quite ordinary in the Philippines that PIPs selling shampoos and conditioners in sachets, or bar soaps in little squares, packs of ¼ kilo hotdogs, cell phone loads at 10 pesos (26 Yen) for 3 minutes call or 10 text messages, thus, allowing PIPs more access to creative business opportunities. Large Filipino corporations engaged in healthy competition by providing rolling stores, uniforms, and other marketing paraphernalia to these people thus bringing a semblance of “formality” in the livelihood activities of this “informal” sector.

     In the end, the private sector may be thinking about profit in venturing on this individualist perspective of economic endeavor, but the end point is that, they provided opportunities for these people living in a $1 dollar a day to engage in business more legitimate, more respectable, and earning more than their previous livelihood of washing clothes, scavenging, or shining shoes. Usually, this small entrepreneurial activity is combined with other equally small entrepreneurial activities such as selling cooked food in packs, sandwiches or the likes.

     Unnoticed, these small activities became now collectively large that it already comprised majority of the economic force of the country. I believe that this economic development approach based on the individualist strategy is a sustainable strategy having been said that the driving force of this economic production machine is within or internally driven. But it is not to say that the private sector does not need capital infusion in the end. The Philippines have a very large informal sector and the private sector needs much more resources to fully tap its potential. At this point, it safe to conclude that, in an individualist approach, we can enable dignity and choice through the existing modalities of free markets.